Auto Insurance Settlements
One minute you're driving down the road and everything's fine. Suddenly and without warning, that lady who was talking on her cell phone failed to see your turn signal and smashed into the back of your new car. The airbags deploy and burn your face and chest. You have just become involved in an auto accident. You shake it off and try to decide if it is shock that is making you hurt or if you are really in physical pain. Yes, you have just been in a car accident. This happens, roughly, every 12 seconds in the United States.
You think quickly and call upon an experienced auto insurance settlement attorney before talking about the details with the adjuster. Smart move! A auto insurance settlement attorney can provide you with the protection and information that you desperately need in such situations.
You must initially understand that car insurance settlement claims usually involve two diverse types of claims: To a specific extent your awarded funds are judged as compensation for your actual damages or losses which you received and as such they should not be construed as taxable income. According to IRS tax rulings, should any of your car insurance settlement be paid to either repair your damaged vehicle or as a reimbursement for your automobile insurance deductible, it should not be considered as a source of income. In simple words, the IRS looks at these unexpected funds as a simple return of your capital, which would restore you to the financial stance you were in prior to your involvement in the accident. Without any doubt then the personal injury amount of your car insurance settlement is not usually viewed as income by the federal tax offices. IRS code Section 104 specifically has excluded any damages received resulting from personal injury as a tax except income However should you be granted a punitive sum then it may likely be vested as a taxable amount. It is likely that IRS would view punitive damage awards as income. Keep clearly in mind that should you be awarded any of these punitive damages they could very well be considered a source of taxable revenue by the IRS. As always, the IRS tax code and its related laws should be completely reviewed and discussed with a professional tax preparer. Only in this way will you be certain of the most up to date and current information on your particular car insurance settlement issues. Of course, the attorneys here at the Ogletree Abbott Law Firm are always willing to answer any questions or concerns that you may have. Feel free to call us any time at 1 (800) 779-4950. We would be happy to discuss your auto insurance settlement case with you at any time.
